The lawsuit claims that "defendants falsely and misleadingly represented that AMD's desktop business was in a 'strong position' and that it would 'continue to rebound' in 2012."

The suit goes on to claim that "as late as April 19, 2012, defendants stated that the demand for the Llano APU was 'higher than anticipated', particularly in the 'emerging markets' and that there were no 'significant issues' in the important desktop market."

But Llano didn't pan out as expected.

In July 2012, AMD announced that weak demand for Llano APUs in desktop devices, particularly in its Chinese and European markets, and this resulted in a lower than expected revenue for the June 30, 2012 quarter.

This caused the price of AMD stock to decline by nearly 25 percent on extremely heavy trading volume.

But that was just the start. Things then got a lot worse.

"Then just weeks later," the lawsuit goes on to explain, "the Company announced that its gross margins for the fiscal 2012 third quarter declined more than 31 percent from its previous quarter, in large part, due to AMD’s recording of an approximate $100 million inventory write-down, mainly attributable to the overstated value of the Llano. On this news, the price of AMD stock declined nearly another 17 percent on extremely heavy trading volume."

AMD states that it is "aware of the complaint" and is "confident that the company's actions and statements were consistent with its obligations under the securities laws'"